From the results of new ultrastructural observations it is likely that chick otic placode formation is not the result of contact of epithelial and neural crest cells in the sense of membrane to membrane apposition. Even though neural crest cells don't actually contact placode cells, their precisional time of appearance and location make it likely that they are interacting. The most obvious change which occurs between them is the buildup of ECM which is very collagenous. Experiments which are underway include: 1) an autoradiographic analysis of the source of various ECM components found in the tissue interspace, 2) the influence of this matrix on placode and neural crest cell differentiation, and 3) the effect of selective enzymatic removal of ECM components on otic development. Since the assay for placode formation is restricted pseudostratification and invagination, the influence of ECM on these processes will be analyzed as well. Ultrastructural analyses continues along several lines. The process of neural crest formation from rhombencephalon is to be examined at the transmission and stero scanning electron microscopic level. Other craniofacial "mesenchymalizations" from epithelium-including sclerotome formation from somite, epibranchial placode cell contributions to cranial ganglia, and otic placode cell exit from otocyst-are being examined for comparison.